Scottish Friendly has launched a new over-50s’ life insurance plan.
The plan helps protect vulnerable customers who may stop paying in whilst also rewarding members with the potential of ending their payments before the age of 90, whilst securing their full cash benefit on death.
The new ‘My Mutual Guaranteed Over 50s Plan’ is the culmination of two years research and development within Galbraith House, the home of Scottish Friendly. Like existing Over 50s plans, the new product is designed to provide members with the security of a fixed cash benefit in the event of their death after two years, provided they make all of their payments.
However as the underlying product, which remains a pure protection product, is built on a with profits platform it means that customers benefit from knowing that, after four years or payments, they will be entitled to a proportion of their selected cash benefit even if they stop paying in.
Furthermore, the with profits element of the product platform means that if the mutual achieves investment growth on their with profits fund then this can be used to provide the customer with an early premium end date.
This means that they will be told to stop their payments and their selected cash benefit will be paid in full in the event of their death.
On taking out a policy with Scottish Friendly, new customers will have the option to select the monthly premium they can afford, which starts from £7 a month, and their desired ‘cash benefit’.
The Scottish Friendly plan is available to anyone aged 50 or over, regardless of their medical history, although it must be started before the age of 75.
A report from Mintel found the number of over 50s life insurance policies taken out during the height of the pandemic in 2020 fell 10% on the previous year, while the total value of new premiums dropped from a high of £67.1m to £61.6m.
Neil Lovatt, commercial director at Scottish Friendly, said: “The over 50s life insurance market has been crying out for change for several years. We realised that we needed to come up with some radical thinking in order to improve the broken model which can expose vulnerable customers to the risk of non payment.
“We are very excited to be launching this game changer development. It’s game changing because it’s our view that this will change the rules of the game going forward for Over 50s products. In time, as the mills of the industry grind out new product designs, we’re expecting others in the industry to follow our lead, but imitation is the sincerest form of flattery.”
